ETUDES FISCALES INTERNATIONALES

The article 14 of the modified finance act for 2011 created a new system taxation for the foreign trusts of which the beneficiaries or the settlors, being physical persons, are or were fiscal residents of France.

The correct application of these new regulations is based at first on the declaration/disclosure of trusts to the French tax authorities and it under the unique administrative and financial responsibility of the indicated trustee called appointed as the manager of the trust.

In the French tax law, the direct responsibility of a trustee is a new notion while it exists in a certain numbers of well known foreign jurisdictions.

Tax regime of trusts in France htlm

Tax regime of trusts in France pdf

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I - The absence of fiscal definition of the trust in French law.. 2

II - The trust in the new fiscal law.. 2

1) A definition of trusts for the French tax system.. 3

1-A) The fiscal definition of the trust3

1-B) Definition of the initial settlor (constituent). 3

1-C) Definition of the fiscal settlor3

1-D) Definition of the beneficiary. 3

2) The obligations of trusts by the trustee. 4

2-A) Who has the responsibility to fill the declaration? The trustee. 4

2-B) Which trusts should be disclosed?. 4

2-C) What should be disclosed. 4

2-D) Penalties in case of non disclosure. 5

2-E) Responsibility for the fines. 5

3) The taxation of the income of a trust. 5

4) The taxation of the assets of a trust. 5

5) The tax regime on transfers by donation or inheritance from a trust. 6

5-A) The general principles. 6

5-C) The chargeable rates for the inheritance taxes. 6

a/ In case of a direct transfer by gift or inheritance. 6

b/ If the gift or the transfer by death can’t be established. 6

c/ Where the trustee is subjected to the law of the non cooperating state. 7

d/ If the settlor is established in France (Art. 792-0 bis)7

e/ Summarized table. 7

5-D) The rule of territoriality applies. 8

5-E) The revision of the rules on the presumption of ownership. 8

5-F) Who is responsible for the payment of the inheritance or gift taxes. 8

6) The tax regime of the assets in a trust. 9

6-A) The principle: the implication of the settlor to Wealth tax. 9

6-B) Maintenance of the tax qualification on assets. 9

6-C) The exception: the withholding tax on trusts. 9

a/ The person legally responsible: an individual person. 10

6-D) The fiscal basis of the French trust tax. 10

a/ The rate of the French trust tax. 11

b/ Exceptions relating to the French trust tax. 11

c/ Pension trusts companies. 11

d/ Charitable trusts or similar. 11

e/ Trusts that regularly declare the Wealth tax. 11

6-E) The accumulation with the tax of 3 %... 12

III - Towards the development of assistance in the recovery of tax. 12

IV - The date of implementation: not applicable for past trusts. 12

11 07_Offshore Investment_Tax regime of trusts in France[1].docx

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